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06/21/89 Leslie Seligman, v. First National Investments

June 21, 1989

LESLIE SELIGMAN, PLAINTIFF-APPELLEE AND CROSS-APPELLANT

v.

FIRST NATIONAL INVESTMENTS, INC., ET AL., DEFENDANTS-APPELLANTS AND CROSS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, THIRD DIVISION

540 N.E.2d 1057, 184 Ill. App. 3d 1053, 133 Ill. Dec. 191 1989.IL.946

Appeal from the Circuit Court of Cook County; the Hon. Nicholas S. Zagone, Judge, presiding.

APPELLATE Judges:

PRESIDING JUSTICE FREEMAN delivered the opinion of the court. WHITE and CERDA, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE FREEMAN

Plaintiff, Leslie Seligman, filed a second-amended complaint, consisting of 13 counts, against defendants, Amr A. Effat, Shashikant S. Patel, real estate brokers, and First National Investments, Inc. , their real estate agency. In the first two counts, plaintiff alleged defendants' breach of a contract to sell him certain real estate in Palatine, Illinois. In the remaining 11 counts, plaintiff alleged defendants' common law fraud and violation of the Consumer Fraud and Deceptive Business Practices Act (the Consumer Fraud Act) (Ill. Rev. Stat. 1985, ch. 121 1/2, par. 261 et seq.) in that transaction. After a bench trial, the trial court entered judgment for plaintiff, in the amount of $5,000, against Patel and FNI on counts I and II. The trial court also dismissed counts III through XIII with prejudice. Lastly, the trial court dismissed defendants' counterclaim with prejudice. Patel and FNI appeal the judgment against them and plaintiff cross-appeals the dismissal of counts III through XIII of his second-amended complaint.

On August 18, 1986, plaintiff was shown the property at 1165 Tern in Palatine, Illinois, by Beverly Schuler, an agent for FNI. Thereafter, plaintiff and Schuler returned to the FNI offices. Before leaving for another appointment, Schuler introduced plaintiff to Effat. According to plaintiff, when he told Effat that he was willing to offer $150,000 on the Tern property, Effat informed him that he would have to offer $165,000 because there was a prior offer on the property. Effat admitted that plaintiff might first have offered $150,000 on the Tern property but claimed that plaintiff wrote $165,000 as the purchase price in the contract. Plaintiff also testified that Effat, who knew plaintiff wanted to resell the property after repairing it, informed him that the property could sell for $225,000 if repaired. Effat claimed he told plaintiff the property could sell at an unspecified higher price if repaired. Effat also admitted that Patel, his partner, had made an offer to purchase the Tern property from Deborah Macaluso on August 16, 1986, that the offer was outstanding on August 18, and that it was accepted on August 22.

As a result of their conversation, Effat prepared a form real estate contract containing plaintiff's offer of $165,000. The contract provided for an earnest money deposit of $5,000 and a closing date of September 15. In the space providing "BROKERAGE FEE: Seller shall pay a brokerage fee as agreed in the listing agreement to," "As agreed to " had been printed. Under the "TITLE" clause, the contract provided: "Title, when conveyed, shall be good and merchantable." Under "GENERAL CONDITIONS" on the back of the contract, the "EVIDENCE OF TITLE" clause provided:

"Seller shall deliver or cause to be delivered to Purchaser or Purchaser's attorney not less than five days prior to the time of closing as evidence of title in Seller or Grantor, one of the following:

(a) Owner's Duplicate Certificate of Title . . . or certified copy thereof . . ..

(b) A title insurance policy or commitment for title insurance . . ..

Every certificate of title, title insurance policy or commitment for title insurance furnished by Seller shall be conclusive evidence of good and merchantable title as therein shown . . .."

Notwithstanding the representation in the contract regarding the brokerage fee, Effat admitted that FNI did not have any listing agreement with Macaluso. Effat also admitted that the contract did not reflect that Patel was attempting to purchase the Tern property on August 18 and that he did not otherwise inform plaintiff of that fact. Plaintiff paid the $5,000 in earnest money within a few days of August 16.

Patel accepted plaintiff's offer by signing the contract on August 23. A few weeks after plaintiff signed the contract, he testified, Schuler told him that Effat's statement as to the value of the Tern property after repairs was too high because he had compared the property to property in a subdivision with homes of higher value than the Tern property. Plaintiff learned that Patel did not hold title to the Tern property when he received a commitment for a title insurance policy from the Chicago Title Insurance Company. He received the title insurance policy about three months after he signed the contract. The parties stipulated at trial that Patel never had any interest in the property.

After hearing all the evidence, the trial court found that: (1) Patel "failed to show good and merchantable title as per the terms of the contract"; (2) plaintiff did not sustain his burden of proof regarding counts III through XIII; and (3) Patel and FNI did not sustain their burden of proof ...


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